I continue my series on production for small or independent fashion businesses over on my site today. Learn how to run financially lean and avoid overstock.
Category Archives: Resources
When you start wholesaling your fashion brand it is important to know two things so that you are not competing with the stores that place order for your product:
- What is the correct season to take orders for (wholesale order timeline).
- When your client will take delivery because this is when you can start offering that product in your retail shop too.
Let’s look into the correct season first. Typically stores place order for product 3-6 month in advance of when they want the product in their store. Once the product is in the store they want it to be relevant to the upcoming season for another 2-3 months. This means that they will order for Spring 4-6 months before Spring actually arrives. In the kids market Spring ordering starts in the Fall and ends in January. You will need to have Spring orders ready to ship January to March with the bulk in Jan/Feb. So if you are trying to sell a Spring collection in the spring and you are not getting orders it is because you are wholesaling the wrong season. In Spring you should actually be trying to take wholesale orders on your Fall line. (Accessories have a different schedule as they fall into a gift market category but can also fall into the clothing schedule too.)
Once your orders start shipping you can then offer your line retail in your own shop. Shops want to offer something new to their shoppers. If you have already been selling it for 6 month it is less appealing to a store to purchase it from you. There are exceptions to this. I have had many stores place immediate orders for product I have listed in my Etsy shop. Those orders are nice but they are few so if you really want to expand wholesale you need to get on the wholesale schedule and market your line to a broader spectrum of retail buyers.
Have a specific wholesale question? Email me at firstname.lastname@example.org
I am thrilled to bring you all my first issue of TFBM MAG! This magazine is packed with gorgeous editorials featuring independent designers (kids and adults), industry articles to help designers run a successful business, and shopping guides to encourage people to shop indie! The magazine is fully interactive so you can click away to designers shops and to industry sites!
Here is the mobile friendly link to check it out! Enjoy and if you want to be involved in the next issue please see the back cover for details.
BONUS For the first issue launch there is also a $500 Etsy Gift Card Giveaway! http://bit.ly/195OZ0W
I am currently undergoing one of those segments in my life I love best. A transformation period. I have my cycles in life and they go something like this:
Curiosity, Learning, Implementing, Teaching, Understanding, Transformation, Curiosity, Learning….
I will forever be a teacher at heart, which is why I started this blog. But I am not a traditional classroom teacher (though I have done that). I really try to absorb the most I can out of life and extend my findings to others. I learn with all my being, not just my brain but with my emotions and my intuition and then I share. I think it is the socially responsible thing to do. As a teacher I am also a life student. Those that love to teach, love to learn. They have curious minds and open hearts. I have also started this blog because of what I can learn from you. I really enjoy my interactions with my fellow designers.
Back to my transformation. I have soaked up a lot in the last 2 years of working with showrooms to get my line seen on a wholesale level. It has been to say the least a BIG learning experience for me. It has consumed me in trying to learn and keep up. It has soaked up my time and hindered my happiness. It has led me to new level of understanding about myself and to make a HUGE decision.
I have come to understand that I feel so consumed by wholesale because it came at me too fast. Because I was struggling to keep up on a path that I was still learning I was drawn away from my true identity as a designer and my heart’s passion, other people. Because I was learning as I went I made a lot of mistakes that costed me time and money. I understand that I wouldn’t change a thing about my path because it has brought me to where I am.
THE HUGE CHANGE Last week I decided I would no longer carry my line in my showrooms. I am taking the wholesale sales responsibilities back and in that allowing myself to design the way I want to design. As I implement my new design cycles I will share them with you all. But know this. I feel in control again. I feel empowered. I feel that my loyal wholesale customers will have no problem with this and I feel new customers can be reached and will be excited about the new way I plan to sell to them.
It is transformation time which means I will be doing a lot about learning and sharing with you. If you are in a position of wanting to sell wholesale but are doing it on your own with no showroom representation, stay with me. You are going to learn a lot.
Today I drove up to the LA California Market Center to my showroom to drop off my Fall samples for market. Market started today so I was a little behind the ball. (Oh the joys of fashion and delayed production.) It turns out my timing hiccup actually played in my favor.
I stayed to help hang and display the line (a nice luxury being so close to my LA showroom) and while I was there a store was placing an order for another collection. Once they finished with that line the rep offered to show them another well known line. They store owners kinda hummed sayng they carried the line before and that the price points were a bit high but said to show them a few things anyway. They looked and commented that the items were cute and asked for prices. Then they commented that the items were darling but designed to be layered and really only “darling” when they were layered. They went on to say that one you put the layers together to make an outfit the customer ends up paying over $100 for one outfit and in this economy it just doesn’t make sense.
They are right.
Look I struggle with cost vs profit margin. It’s tough. For most of my items I don’t make the normal “double your cost to get your wholesale price” spread. I often work backwards. I look at what a fair market price is and then try to get my labor and fabric prices down to increase my profit margin. I do this in hopes that stores will pick up the line in this economy and that it sells well for them. If I can get loyal customers now by catering to their needs (designing at price points that fit our current economy) then I know they will be loyal customers when the economy turns around and then I can reintroduce higher price point items.
I encourage you to look at your prices today. Do they fit the current market/economy?
OK so this post is way overdue! I have to admit that sometimes I hesitate to write on a topic because I haven’t completely figured it out yet. BUT I have reminded my self of my committment to my readers to not share all the answers but what I have learned so far on my journey that may help others. So here it is my list of what I know about cash flow and a fashion business.
1. It sucks. But it must be mastered if you want to run a successful profitable business.
2. You need a line of credit but most banks won’t give you one in your first couple years until you show increased profitability and a certain level of income from your business. This means you have to rely on credit cards with usually higher rates in the meantime.
3. When you are ready to apply for a line of credit be sure you have: a tax return of the most recent year. A profit and loss sheet showing you are not spending more than you are making. Banks want to loan to people they know can afford to pay them back.
4. Be smart about what you use a line of credit for. Using it for production costs until your customer pays for the order (since you front production costs) is a smart way to use the line of credit. Buying all of your materials up front so you can receive a discount is another smart way to use your line of credit. Redecorating your studio is not a smart way to use a line of credit. Wait until you have cash in the bank for something like that.
5. Know your terms. If you have to pay your line of credit back every 30 days you need to make sure you are managing your production and cash flow effectively. If you are not good with numbers hire a bookkeeper. Yes it’s an expense but much less costly than all the interest fees and potential loss of your line of credit.
Ok so all this talk of line of credit. Do you really need it? Why should you consider it?
1. You have opportunities to go into larger ventures. Often deals with larger companies have net terms and high volume. If production is going to cost $5000 dollars and you won’t get paid on your order for 60 days the line of credit bridges the gap.
2. You currently buy your supplies in small quantities and as such pay a higher price for goods. With this you run the risk of the supplier running out of your material when you need more. However you can’t afford to buy more at one time due to cash flow. This really applies to businesses that wholesale and plan their seasons 6 months or more in advance. Cash flow aside (If you pay $12 a yard because you buy less than 15 yards at a time consider that you can buy 30 yards for the same price at wholesale. Start calling the direct manufacturer if you are currently buying from a distributor.)
3. You are having a hard time paying for both your household expenses and fronting the production costs for your business.
My husband was in banking prior to joining kangacoo designs and still I was denied my first time I asked for a line of credit. It’s very important to find a bank that deals with small business start ups and will take the time to tell you the requirements they have for offering a line of credit. Not all banks have the same requirements so shop around.
Cashflow really goes hand in hand with production managament, sale management and also in making smart choices when buying services to help you atart up your business. I will talk more about this in the coming months. In the meantime I welcome your questions on cash flow. Email me email@example.com.
Before the holiday season I had the pleasure of interviewing Camilla of Soldat Tailoring. While Camilla gets her women’s wear line off the ground she opened a sample making service for extra income. I jumped at the chance to pick her brain and have her lay out the sample making process for you, my readers. Since then Camilla is now moving on from sample making to opening a small production shop. Once she is up and running I will be interviewing her again so you can learn about her services. For now read on to learn about sample making and how it applies to you the designer.
Outline why someone should use a sample maker rather than do it themself or pay a production shop.
What is the importance of a good sample?
How does the sample making process work and what does someone need to supply a sample maker to get started?
What if someone is not happy with their samples?